Resilient Mexico raises forecasts as growth trumps expectations

Mexico’s central bank on Wednesday raised its 2017 growth forecast, a sign Latin America’s No. 2 economy has proved resilient to policy proposals by U.S. President Donald Trump that were expected to harm exports and investment.

Mexico’s first-quarter gross domestic product was stronger than forecast and 2017 growth should come in between 1.5 – 2.5 percent, up from a previous estimate of 1.3 – 2.3 percent, the bank said in its quarterly inflation report. The upgrade came after the finance ministry raised its growth outlook last week.

Banco de Mexico kept its 2018 growth expectations unchanged, however, at between 1.7 – 2.7 percent. Inflation will be above the 4 percent target range for most of this year, but should trend down toward the end of 2017, and converge toward the 3 percent target by the end of 2018, the bank said.

The growth estimates were seen as good news for Mexican President Enrique Pena Nieto whose party faces a closely-fought state election this weekend that serves as a curtain-raiser for the presidential vote in 2018.